Country Report Hungary 2019

國家報告

  • 匈牙利
  • 一般經濟

2019年10月15日

The forint remains vulnerable to international investors’ sentiment due to the elevated external and public debt levels and institutional issues.

hu 2019 pic1
hu 2019 pic2
hu 2019 pic3

Political situation

Troublesome relationship with the EU remains

The ruling conservative coalition of the Fidesz and KDNP parties under Prime Minister Viktor Orbán has repeatedly taken actions that led to confrontations with the EU commission and its EU peers (e.g. a controversial media law, some constitutional amendments curbing judicial independence, a tough stance in the migrant policy and a pro-Russia stance. Together with some unorthodox economic policy decisions like additional taxes on banks, the government’s repeated confrontations with the EU have led to some uncertainty among its European peers and international investors in the past.

In the April 2018 general elections the coalition government won again, and with its two-thirds majority in parliament it can alter the country’s constitution all by itself.

 

Economic situation

Decelerating growth in 2020

In 2019 economic growth is expected to remain robust, driven by high levels of investment, while private consumption and export remain solid. However, in 2020 GDP growth is expected to decelerate below 3% due to lower household consumption, a marked slowdown in investment activity, and lower export growth, as demand from Hungary’s main export markets is decreasing. Consumer prices started to rise again in 2017 and 2018, and are forecast to remain above 3% in 2019 and 2020, mainly because of robust wage growth over the last two years.

Containing the budget deficit to 3% of GDP is a top priority of the administration in order to avoid EU sanctions. However, since 2010 the government has been using unorthodox ways to balance the budget, most notably extraordinary taxes on banks and utilities. The budget deficit is forecast to decline modestly in 2019 and 2020. Despite annual decreases, public debt remains high at about 68% of GDP in 2019. (Central-Eastern Europe median is about 50% of GDP).

 

High external debt level remains a major weakness

Hungary’s major weakness remains its elevated level of external debt (about 80% of GDP in 2019). A large share of this debt is foreign currency-denominated, which exacerbates the problem, as a sharp forint depreciation would hurt many Hungarian households and businesses whose loans are denominated in foreign currencies. Additionally, more than 30% of public debt is denominated in foreign currency. The forint remains vulnerable to international investors’ sentiment due to the elevated external and public debt levels and a suboptimal institutional and policy environment.

hu 2019 pic4

 

 

 

 

 

 

 

 

 

 

 

 

相關資料

免責聲明

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.